Amazon.com has made a formal offer to buy a 60 per cent stake in online retail rival Flipkart, CNBC-TV18 reported on Wednesday, citing sources. Amazon reportedly offered an amount "on par" with Walmart's (for a smaller stake in the firm) and included a $2bn break-up fee. Reliable sources claim that Amazon has offered the same price as Walmart along with an additional provision of United States dollars 2 billion in terms of the breakup fee if the pact is unsuccessful.
A spokesman for Walmart declined to comment, while Amazon said it does not offer comments on rumors and speculation.
It is learnt that the U.S. online retail giant is also seeking a non-compete clause that bars the current founders of Flipkart from operating in the same business for a period of around two years.
The talks between Flipkart and Walmart are going smooth till now and the deal will be finalized by June 2018.
It is interesting to see how all this pans out and if Flipkart considers the offer from Amazon, or accepts Walmart's offer to take on Amazon head-on in what is now a fiercely fought battle in the Indian e-commerce arena. Flipkart did not immediately respond to an email seeking comment.More news: Rain set for Scotland as London braced for Bank Holiday heatwave
This news is coming when Walmart is investing a big amount in Flipkart to Buy 52% -86% share in Flipkart.
Previous reports have stated that Flipkart's founders and investors have been uncomfortable with selling their stake to Amazon given that the deal could face regulatory hurdles.
The Securities and Exchange Board of India (Sebi) has asked stock exchanges to furnish information on the company's share price data for the last one month to check for any possible violation of insider trading norms, sources said. India's leading e-tailer, besides, has been looking to open retail stores in India for a long time now but has been waiting for the right investment partner.
If it wins the deal, Walmart would purchase both new and existing Flipkart shares, with the new shares expected to set Flipkart's value at a minimum of $18 billion, Reuters noted.
In an interview with Reuters on Tuesday, McKenna said India was a "growth market", and downplayed analyst criticism that the company has been slow to move in the country.